Air Canada talks new low-cost carrier to be launched in June

October 3, 2012

Air Canada recently announced it will be integrating a new low-cost carrier as a part of the new leisure group taking flight in June, according to The Vancouver Sun. This move will ramp up the amount of Air Canada planes to 50 additional aircrafts.

"Our new leisure group will benefit from combining the low-cost carrier with the strong brand reputation of Air Canada Vacations and leveraging the established marketing and distribution channels of both Air Canada Vacations and Air Canada," Air Canada CEO Calin Rovinescu told the news source. “As a result, Air Canada will be able to compete more effectively in this highly dynamic and expanding market."

The details about the carrier’s name and schedule will be announced later this year, when Air Canada releases its schedule for 2013, the media outlet reports.

The low-cost carriers will attract the bargain-seekers, but it could also deter some of the higher-paying customers, as they will not want to be on a plane with more seats and less room. These low-cost carriers are most likely good news for consumer spending, but that all depends on how fast the new planes are put out.

"If they're added in aggressively, then the capacity will be raised and that's always good for the consumer," David Typerman of Canaccord Genuity told the news outlet."If they're added in a relatively slow manner it may not make much difference because the market does grow over time so they may just be picking up the growth in the market."